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This paper examines the shareholder primacy norm (SPN) as a widely acknowledged impediment to corporate social responsibility and explores the role of business schools in promoting the SPN but also potentially as an avenue for change by addressing misconceptions about shareholder primacy and the purpose of business. We start by explaining the SPN and then review its status under US and UK laws and show that it is not a likely legal requirement, at least under the guise of shareholder value maximization. This is in contrast to the common assertion that managers are legally constrained from addressing CSR issues if doing so is inconsistent with the economic interests of shareholders. Nonetheless, while the SPN might be muted as a legal norm, we show that it is certainly evident as a social norm among managers and in business schools—reflective, in part, of the sole voting rights of shareholders on corporate boards and of the dominance of shareholder theory—and justifiably so in the view of many managers and business academics. We argue that this view is misguided, not least when associated with claims of a purported legally enforceable requirement to maximize shareholder value. We propose two ways by which the influence of the SPN among managers might be attenuated: extending fiduciary duties of executives to non-shareholder stakeholders and changes in business school teaching such that it covers a plurality of conceptions of the purpose of the corporation.

In a society where the ideology of shareholder value maximization (SVM) prevails, how do evaluators make appraisal and bonus decisions when corporate social responsibility (CSR) measures and financial measures in the balanced scorecard (BSC) point in different directions? To explore this question, we conducted two studies to develop and test a conceptual framework. Participants were asked to evaluate the performance of two managers, using a case we wrote about a commercial bank. We found that (1) evaluators are more willing to drop CSR performance measures than financial measures from the evaluations; (2) perceived CSR relevance is influenced by where evaluators stand in regard to CSR (\"stakeholder view\" in the \"Perceptions of the Role of Ethics and Social Responsibility\" or PRESOR scale) and also by where evaluators believe shareholders stand (shareholder support); and (3) there is a financial bias in appraisal and bonus decisions when CSR measures are used in the BSC, consistent with SVM ideology. We conclude by discussing the implications of the influence of SVM ideology on the use of CSR measures in terms of business research, practice, and education.

The concept of organizational stigma has received significant attention in recent years. The theoretical literature suggests that for a stigma to emerge over a category of organizations, a \"critical mass\" of actors sharing the same beliefs should be reached. Scholars have yet to empirically examine the techniques used to diffuse this negative judgment. This study is aimed at bridging this gap by investigating Goffman's notion of \"stigma-theory\": how do stigmatizing actors rationalize and emotionalize their beliefs to convince their audience? We answer this question by studying the stigma over the finance industry since 2007. After the subprime crisis, a succession of events put the industry under greater scrutiny, and the behaviors and values observed within this field began to be publicly questioned. As an empirical strategy, we collected opinion articles and editorials that specifically targeted the finance industry. Building on rhetorical analysis and other mixed methods of media content analysis, we explain how the stigmatizing rhetoric targets the origins of deviant organizational behaviors in the finance industry, that is, the shareholder value maximization logic. We bridge the gap between rhetorical strategies applied to discredit organizations and ones used to delegitimize institutional logics by drawing a parallel between these two literatures. Taking an abductive approach, we argue that institutional contradiction between field and societal-level logics is sufficient, but not necessary to generate organizational stigma.

Purpose - The importance of supply chain alignment has been discussed since the birth of supply chain management (SCM). Yet it remains a major challenge for supply chains. This paper aims to systematically review the cross disciplinary literature on supply chain alignment in order to identify, and develop constructs for enablers to alignment, and an associated set of hypotheses.Design methodology approach - A systematic approach has been taken to the literature review, which ensures it is auditable and repeatable. The selection criteria are clearly aligned with the review question ensuring all literature pertinent to the question is identified and reviewed. Relevant information is extracted from the selected papers and synthesised into a set of hypotheses.Findings - Six main constructs for the enablers of alignment are identified and defined: organisational structure, internal relational behaviour, customer relational behaviour, top management support, information sharing and business performance measurement system. While the literature is disparate, across different disciplines there is good support for these enablers. The relationships between supply chain alignment and shareholder and customer value are also argued with the support of the literature. Although each of the enablers is argued to positively affect shareholder and customer value, their interactions with one another are not well supported in the literature, either theoretically or empirically, and therefore this could be an area for further research.Research limitations implications - While the hypotheses remain theoretical, it is now possible to test them and understand the relative significance of the various enablers to alignment.Practical implications - The significance of shareholder and customer alignment on the delivery of shareholder and customer value can be examined, thus moving towards a theory of supply chain alignment. This is needed since in practice companies are struggling with supply chain alignment.Originality value - The existing literature on supply chain alignment is disparate and multi-disciplinary as this descriptive analysis shows, with 72 papers published in 43 different journals. Moreover, most of the papers focus on particular enablers, while this paper brings together six key enablers from the literature to produce a set of hypotheses.

Can a marketer drive the stock price of the firm? Yes, it should be possible. Toward this endeavor, the authors develop a framework to link customer equity (CE) (as determined by the customer lifetime value metric) to market capitalization (MC) (as determined by the stock price of the firm). The authors test the framework in an empirical field experiment with two Fortune 1000 firms in the business-to-business and business-to-consumer contexts, respectively. The findings show that (1) a CE-based framework can reliably predict the MC of the firm and (2) marketing strategies directed at increasing the CE not only increase the stock price of the firm but also beat market expectations. Furthermore, the results indicate that the relationship between CE and MC is moderated by risk factors in the form of volatility and vulnerability of cash flows from customers. By accounting for these factors, the authors improve the association between CE and MC. The findings broaden the scope and role of marketing while reinforcing the importance of the marketer to any organization.

Purpose The purpose of this paper is to determine if there is a link between corporate shareholder value creation and economic growth. The first objective of this paper is to determine which specific shareholder value measurement best explains shareholder value creation for a particular industry. The next objective of the study is to establish, for each of nine different categories of firms examined, a set of value drivers that are unique and significant in expressing shareholder value for that particular category of firms. Lastly, the relationship between shareholder value creation and economic growth is tested. Design/methodology/approach To quantify and measure value creation, the paper investigates the various value creation measurements that are being applied. The next step is to ascertain whether various industries have different value creation measures that best explain value creation for the respective industries. Then, the value drivers of these specific value creation measures can be determined and their relationship with economic growth tested. Findings The results of this study indicate that each industry does have a specific shareholder value creation measurement that best explains shareholder value creation for that industry; for example, for five of the nine categories (industries) that were analyzed, market value added was found to be the best shareholder value creation measurement, but for capital-intensive firms and manufacturing firms, the Qratio is the best measure, while for the food and beverage industry, the market to book ratio was found to be a better measure of shareholder value creation than other measures tested. It was further found that an increase in corporate shareholder value creation is to the detriment of economic growth. Originality/value The contribution of the present study is its determination of a unique shareholder value creation measurement for particular industries. In addition, a specific set of variables per industry that create shareholder value is identified. Lastly, the important link between shareholder value creation and economic growth is exposed.

Purpose - The relationship between supply chain management (SCM) competency and firm performance is not well established empirically. This is largely because proven metrics for quantifying the effects of SCM are scarce. Drawing on the strategic managerial concept of supply chain orientation as a source of competitive advantage, this paper aims to apply three independent sources of secondary data to examine the influence of SCM competency on two important firm performance metrics: customer satisfaction and shareholder value.Design methodology approach - SCM competency is assessed with data from the expert opinion element of Gartner Supply Chain Group's (formerly AMR Research) supply chain top 25 rankings; the American Customer Satisfaction Index (ACSI) database and the recently developed Economic Value Added (EVA) Momentum financial metric are utilized as outcome measures.Findings - Firms recognized by peers and experts for superior SCM competency exhibit higher levels of customer satisfaction and shareholder value than their respective industry averages.Research limitations implications - Further evidence is required to prove causality does exist between these variables. Limitations associated with the use of secondary data restricted the number of top performer firms available for this analysis. Nevertheless, the strong correlations found between SCM competency and two critical firm performance metrics may help senior managers and managers from other functional areas to better understand potential advantages associated with developing greater SCM competency.Practical implications - The assessment of two metrics that differentiate top SCM performers from their industry competitors may also help SCM professionals to better convey the impact of SCM competency to non-supply chain managers and external participants in the supply chain whose support and cooperation are critical to the success of process improvement initiatives.Originality value - In addition to the study findings, blending qualitative expert opinion, formal customer satisfaction and quantitative financial performance secondary data represents a relatively novel and informative method that responds to contentions that different approaches should be employed to develop a more holistic understanding of SCM.

This article analyzes and illustrates the role of payment terms for working capital improvements in supply chains. So far, research has shown how individual industries and powerful companies were able to enhance their cash-to-cash cycles at both their supplier's and customer's expense. From a \"network perspective,\" the exploitation of individual advantages by a single powerful company lowers the overall financial wealth of the supply chain. Therefore, a collaborative working capital management approach is proposed, by which the cash-to-cash cycles of companies with the lowest weighted average cost of capital (WACC) should be extended, while companies with higher financing costs are relieved by a shortened cash-to-cash cycle. An unequal distribution of power, however, between supply chain members can be the main hindrance for developing a collaborative working capital management solution. [PUBLICATION ABSTRACT]

This article introduces the concept of a stock value gap-the shortfall of a firm's actual market value from its optimal market value, as measured by a best-performing benchmark. Using a large-scale, real-world database, the authors test the effects of both customer satisfaction and customer complaint on the stock value gap of firms. The results show that customer complaint has a stronger effect than customer satisfaction on the value gap. Furthermore, there is some support for the moderating influences of working capital and firm specialization. The results provide actionable guidelines to build a more complete customer equity dashboard and encourage managers to provide a supportive organizational environment to create shareholder value.

Enhancing shareholder value is one of the primary goals along with the profitability in the competitive world. Top-level management is striving for creating the higher shareholder value by making efficient decisions. Shareholder value as the key objective of the firm and measures such as economic value added, market value added, shareholder value added and created shareholder value (CSV) have gained popularity in measuring the shareholder wealth creation. Among various financing decisions, capital structure decision plays a vital role, that is, mix of debt and equity. Considering the optimal capital structure with the right balance between equity and debt is always a challenge for the financial managers, and also to run the business successfully by gaining higher profits and enhancing shareholder value. An attempt has been made to analyse the capital structure impact on shareholder value by considering CSV as a shareholder value measure in 77 Indian pharmaceutical firms listed in BSE over a period of 9 years from 2007 to 2015. Using the balanced panel data and regression models, we found that determinants such as debt–equity ratio, long-term debt ratio and short-term debt ratios have positive correlation with CSV and negatively related to total debt ratio in the absence of tax.